2013-04-15 19:08 (UTC)
XE Market Analysis
The dollar ended a bit firmer versus the euro and softer against the yen in N.Y. dealings on Monday, as stocks and commodities were routed on the back of weaker Chinese data, and more softer U.S. data. The April Empire State index was weaker than forecasts, while the NAHB housing market index for April unexpectedly dipped. Gold dropped over $130/ounce to under $1,370, while NYMEX sagged nearly $3/bbl to the $88 handle. EUR-USD was unable to sustain the 1.3100 handle, easing back under 1.3045 in thin afternoon trade, while USD-JPY dove under 97.20.[EUR, USD]
EUR-USD was pressured by risk aversion, which fueled selling pressure over the 1.3100 area in early N.Y. trade. The euro got an early fillip in London on news that Greece reached a deal with troika, which will enable it to receive the next bailout tranche. However, the impact was limited as intra-day accounts keyed off negative stock market performance and the continued rout in commodities. Afternoon trade saw EUR-USD fall to the 1.3045 region as a mid-afternoon wave of sell orders hit the stock market.[USD, JPY]
USD-JPY lost ground after it was unable to sustain early buying interest. It chopped either side of 98.00 early on and extended to 98.70 after comments from BoJ Governor Kuroda, who offered his commitment to reaching the CPI inflation target. Thereafter, yen movement was dominated by risk aversion after weaker than expected data from China squeezed out speculative positions. The pairing attempted to hold the 98 handle in afternoon dealings, though faded back under 97.20 into the close, as stocks stayed down, and risk aversion remained high.[GBP, USD]
Cable posted recovery highs of 1.5345 just ahead of the U.S. releases as light dollar selling was observed across the board. It pulled back quickly to 1.5325 after EUR-GBP demand went through. The cross broke the top of the European session range at 0.8540 on light corporate interest, which came in tandem with EUR-USD's move back into 1.3100. A mid-afternoon sell-off on Wall Street supported the dollar into the close, taking cable to 1.5275.[USD, CHF]
CHF firmed up from the European open as European names headed for safety as European stocks were weighed by the risk off theme after weaker than expected China GDP data. EUR-CHF met early sellers from 1.2170 and it headed back to Asian lows around 1.2150 and flushed out weak longs to reach intra-day lows under 1.2145. The move into the swissy fueled a USD-CHF move from just over 0.9310 down to 0.9285, though it remains supported just ahead of Asia opening levels around 0.9270 and last Friday's 0.9265 base. Given today's risk off theme, the dollar found buyers on dips, taking USD-CHF to highs over 0.9325.[USD, CAD]
USD-CAD was able to reclaim the 1.0200 handle in London trade, reacting to the awful risk backdrop, which included a sharp sell-off in gold and oil prices. Buy stops were reported at 1.0205-10, and the pairing managed 1.0225 highs. Initial resistance is seen at 1.0235 (April 5 highs), with more stops from 1.0240. To the downside, light bids are noted at 1.0200 and 1.0170. The Canadian economic calendar was empty, so focus remained on U.S. releases and risk levels. Risk levels stabilized at lower levels, allowing USD-CAD to idle over 1.0200 through the afternoon.